Shares of Lululemon and Ulta Beauty rallied Friday following late-Thursday earnings reports from the two specialty retailers. Analysts hiked price targets for both stocks after results. The pair were among the top performers in the S&P 500 for the day.
Lululemon reported a 7% increase in earnings to $2.87 per share to beat FactSet estimates of $2.71 per share. Revenue jumped 9% to $2.4 billion, also beating views for $2.36 billion.
Lululemon's overall comparable sales rose 4%, offset by a 2% decrease in the Americas. International comparable sales were up 25% for the quarter.
The company's board on Dec. 3 approved a $1 billion increase to the stock repurchase program, bringing the total authorization to $1.8 billion.
Lululemon guided Q4 earnings expectations to between $5.56 to $5.64 per share, with sales ranging from $3.475 billion and $3.510 billion. FactSet expects earnings of $5.64 per share on $3.47 billion in sales.
The athleisure retailer expects 2024 earnings to range from $14.08 to $14.16 per share, on $10.452 billion to $10.487 billion in sales. The 2024 guidance was in-line with analyst estimates for $14.14 per share on $10.48 billion in revenue.
BTIG hiked its price target on Lululemon stock by $70 to 430 after results, noting the America's business remains stable and its women's business reaccelerates while markdowns were flat, The Fly reported. BTIG kept a buy rating on the shares. Baird also lifted its price target on LULU stock to 440 from 380 and maintained its outperform rating.
LULU stock leaped nearly 16% Friday, to lead the S&P 500 and mark its seventh consecutive daily gain. Lululemon has rebounded almost 77% from its 2024 low of 226.01 in early August. Still, LULU stock has tumbled 22% so far this year.
Ulta Beauty
Ulta Beauty cleared forecasts with a 1.4% increase in earnings to $5.14 per share on 1.7% revenue growth to $2.53 billion. FactSet expected earnings of $4.53 per share on $2.5 billion in sales.
The beauty shop and cosmetics chain's comparable sales ticked up 0.6% for the quarter, with a 0.5% increase in transactions and a 0.1% increase in average ticket prices.
Ulta Beauty narrowed its 2024 outlook slightly, now expecting net sales to range from $11.1 billion to $11.2 billion. Previous earnings guidance ran from $11 billion to $11.2 billion for the year.
Ulta expects comparable sales to be flat or decline 1%, when its prior outlook called for up to a 2% decline. The retailer maintained its new and remodeled store projections.
Ulta Beauty also increased its earnings forecast to range from $23.30 to $23.75 per share, from earlier views for $22.60 to $23.50 per share. FactSet expects 2024 earnings of $23.54 per share on $11.197 billion in revenue.
Barclays on Friday raised its price target on ULTA stock to 410 from 335 and kept an equal weight rating on the shares, noting the company lifted its guidance on all metrics attributable to the Q3 beat. However, the firm expects comparable sales to be down in Q4. Citi hiked its target on Ulta Beauty by $60 to 450, saying the company's Q4 outlook is conservative despite the heightened competitive environment and remaining category headwinds. Citi kept a neutral rating on the stock.
ULTA stock rallied 9% Friday, to punch above its 200-day moving average.
Shares have leaped more than 34% from their August low of 318.17. For the year, Ulta Beauty stock has fallen almost 13% in 2024.
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